Radio Settles SESAC Spat

SESAC, Inc., Thursday, July 23, 2015 announced that the Radio Music License Committee (RMLC) has voluntarily dismissed the last antitrust lawsuit remaining against SESAC, which was initiated by the RMLC in October 2013.

The monetary component of the settlement includes no damages and an agreement by SESAC to only reimburse the RMLC’s legal expenses in the amount of approximately $3.5 million.  The amount of reimbursed legal expenses is less than the cost SESAC would incur were it to litigate the case to conclusion.  This settlement marks another important step in SESAC’s ongoing effort to assure that music creators receive fair market value for their compositions.

John Josephson, Chairman and CEO, SESAC, Inc., said  “With this settlement, we’ve secured commercial arbitration for the next 22 years as the basis for setting SESAC’s license fees for commercial radio stations represented by the RMLC.  This guarantees a level playing field in establishing the fair market value of our creators’ musical works for the broadcast radio industry.

John Joseph

Settlement of the RMLC litigation will allow SESAC management to pursue the company’s previously announced strategy under its new leadership team of a simplified and more efficient, multi-right, multi-territory licensing model utilizing an ongoing focus on information technology and data science to meet the developing needs of music users, distributors, writers, composers, publishers and other stakeholders.  Earlier in July, SESAC announced that it was poised to acquire the Harry Fox Agency (HFA), the leading mechanical rights licensor in the United States. The transaction will position SESAC as the only U.S. rights organization with the ability to offer singular licenses for the works of its affiliated writers and publishers, aggregating both performance and mechanical rights.

Key elements of the settlement announced include:

• SESAC pays only approximately $3.5 million, which represents legal fee reimbursement only, no damages.
• The RMLC dismisses its lawsuit with prejudice and commits not to claim, for the duration of the settlement agreement, that SESAC is violating the antitrust laws so long as SESAC adheres to the settlement.
• SESAC’s current license fees to commercial radio stations are undisturbed and will remain in place through the end of 2015, continuing on an interim basis into 2016. This is subject to a negotiated agreement on the 2016 rates or a final decision in an arbitration to be conducted in early 2017.
• The settlement states that SESAC and the RMLC will arbitrate the licensee fees owed to SESAC for the next 22 years, through 2037, if the parties don’t reach agreement in negotiation.
• The RMLC agrees that SESAC is entitled to be compensated for the full value of works in its repertory, even if SESAC affiliates own less than 100% of the copyright interest in any particular musical work.  Neither the RMLC nor any of the thousands of stations it represents can argue that SESAC should receive any diminution of value for these split works other than proportionately to the partial interests SESAC represents.

The settlement has been approved by SESAC’s Board of Directors and the RMLC Executive Committee.